Government Contracts

November 3, 2018 - 0 Comments

From a business perspective, working under government contracts can be a verylucrative proposition. In general, a stream of orders keep coming in, revenueincreases and the company grows in the aggregate. The obvious downfalls toworking in this manner is both higher quality expected as well as the extensiveresearch and documentation required for government contracts. If a part fails toperform correctly it can cause minor glitches as well as problems that can carryserious repercussions, such as in the National Semiconductor case. When both theculpable component and company are found, the question arises of how extensivethese repercussions should be. Is the company as an entity liable or do you lookinto individual employees within that company? From an ethical perspective onewould have to look at the mitigating factors of both the employees and theirsuperiors along with the role of others in the failure of these components. Nextyou would have to analyze the final ruling from a corporate perspective and thenwe must examine the macro issue of corporate responsibility in order to attemptto find a resolution for cases like these. The first mitigating factor involvedin the National Semiconductor case is the uncertainty, on the part of theemployees, on the duties that they were assigned. It is plausible that duringthe testing procedure, an employee couldnt distinguish which parts they were totest under government standards and commercial standards. In some cases theymight have even been misinformed on the final consumers of the products thatthey tested. In fact, ignorance on the part of the employees would fully excusethem from any moral responsibility for any damage that may result from theirwork. Whether it is decided that an employees is fully excused, or is given somemoral responsibility, would have to be looked at on an individual basis. Thesecond mitigating factor is the duress or threats that an employee might sufferif they do not follow through with their assignment. After the bogus testing wascompleted in the National Semiconductor labs, the documentation department alsohad to falsify documents stating that the parts had surpassed the governmentaltesting standards. From a legal and ethical standpoint, both the testers and thewriters of the reports were merely acting as agents on direct orders from asuperior. This was also the case when the plant in Singapore refused to falsifythe documents and were later falsified by the employees at the have Californiaplant before being submitted to the approval committees (Velazquez, 53). Thewriters of the reports were well aware of the situation yet they acted in thismanner on the instruction of a supervisor. Acting in an ethical manner becomes asecondary priority in this type of environment. As stated by Alan Reder, . ..

if they the employees feel they will suffer retribution, if they report aproblem, they arent too likely to open their mouths. (113). The workers knewthat if the reports were not falsified they would come under questioning andperhaps their employment would go into jeopardy. Although working under theseconditions does not fully excuse an employees from moral fault, it does startthe divulging process for determining the order of the chain of command ofsuperiors and it helps to narrow down the person or department that issued theoriginal request for the unethical acts. The third mitigating factor is one thatperhaps encompasses the majority of the employees in the National Semiconductorcase. We have to balance the direct involvement that each employee had with thedefective parts. Thus, it has to be made clear that many of the employees didnot have a direct duty with the testing departments or with the parts thateventually failed. Even employees, or sub-contractors, that were directlyinvolved with the production were not aware of the incompetence on the part ofthe testing department. For example, the electrical engineer that designed thedefective computer chip could act in good faith that it would be tested toensure that it did indeed meet the required government endurance tests. Also,for the employees that handled the part after the testing process, they weredealing with what they believed to be a component that met every governmentalstandard. If it was not tested properly, and did eventually fail, isnt thetesting department more morally responsible than the designer or the assemblyline worker that was in charge of installing the chip? Plus, in largecorporations there may be several testing departments and is some cases one maybe held more responsible than another depending on their involvement. A processlike this can serve the dual purpose of finding irresponsible employees as wellas those that are morally excused. The fourth mitigating factor in cases of thisnature is the gauging of the seriousness of the fault or error caused by thisproduct. Since National Semiconductor was repeatedly being reinstated to thelisted of approved government contractors, one can safely assume that the levelof seriousness, in the opinion of For the contractor approval committees, is notof monumental importance. Yet one has to wonder how this case would have beendifferent if the lack of testing did cause the loss of life in either a domesticor foreign military setting. Perhaps the repercussions would have come fastermuch more stringent. The fact that National Semiconductor did not cause a deathdoes not make them a safe company. They are still to be held responsible for anyerrors that their products cause, no matter the magnitude. As for the oppositionto the delegating of moral responsibility, mitigating factors and excusingfactors, they would argue that the entity of the corporation as a whole shouldbe held responsible. The executives within a corporation should not be forced tobring out all of the employees responsible into a public forum. A company shouldbe reprimanded and be left alone to carry out its own internal investigation andrepercussions. From a business law perspective this is the ideal case since acorporation is defined as being a separate legal entity. Furthermore, theopposition would argue that this resolution would benefit both the company andthe government since it would not inconvenience either party. The originalresolution in the National Semiconductor case was along these lines. Thegovernment permanently removed National from its approved contractors list andthen National set out to untangle the web of culpability within its ownconfines. This allowed a relatively quick resolution as well as the idealscenario for National Semiconductor. In response, one could argue that theentity of a corporation has no morals or even a concept of the word, it is onlyas moral and ethical as the employees that work in that entity. All of theemployees, including top ranking executives are working towards advancing theentity known as their corporation (Capitman, 117). All employees, including thesub-contractors and assembly line workers, are in some part morally responsiblebecause they should have been clear on their employment duties and they allshould have been aware of which parts were intended for government use.

Ambiguity is not an excusing factor of moral responsibility for the workers.

Also, the fact that some employees failed to act in an ethical manner gives evenmore moral responsibility to that employee. While some are definitely moremorally responsible than others, every employee has some burden of weight inthis case. In fact, when the government reached a final resolution, they decidedto further impose repercussions and certain employees of National Semiconductorwere banned from future work in any government office (Velazquez, 54). Lookingat the case from the standpoint of National Semiconductor, the outcome wasfavorable considering the alternate steps that the government could taken. Asexplained before, it is ideal for a company to be able to conduct its owninvestigation as well as its own punishments. After all, it would be best for acompany to determine what specific departments are responsible rather thanhaving a court of law impose a burden on every employee in its corporation. Yet,since there are ethical issues of dishonesty and secrecy involved, NationalSemiconductor should have conducted a thorough analysis of their employees aswell as their own practices. It is through efforts like these that a corporationcan raise the ethical standard of everyone in their organization. This casebrings into light the whole issue of corporate responsibility. The two sidesthat must ultimately be balanced are the self interests of the company, withmain goal of maximum profit, and the impacts that a corporation can cause onsociety (Sawyer, 78). To further strengthen this need, one could argue thatthere are very few business decisions that do not affect society in way oranother. In fact, with the plethora of corporations, society is being affectedon various fronts; everything from water contamination to air bag safety is aconcern. The biggest problem that all of us must contend with is that everydecision that a business makes is gauged by the financial responsibility totheir corporation instead of their social responsibility to the local community,and in some cases, the international community. This was pointed out on variousoccasions as the main reason why National Semiconductor falsified their reports.

The cost that the full tests would incur did not outweigh their profit margins.

Their business sense lead them to do what all companies want . . . maximumprofit. In the opinion of the executives, they were acting in a sensible manner.

After all, no executive wants to think of themselves as morally irresponsible. (Capitman,118). The question that naturally arises, in debating corporate responsibility,is what types of checks and balances can be employed within a company to ensurethat a corporation and all of its agents act in an ethical manner. Taking theexample of the National Semiconductor case, one can notice many failures inmoral responsibility. National Semiconductor would have to review its employees,particularly the supervisors, for basic ethical values such as honesty. example,ultimately it was the widespread falsification of the testing documentation thatcaused the downfall of National Semiconductor, not the integrity of theircomponents. In the synopsis of the case it is never mentioned that the employeesinitiated this idea, it would seem that it was the supervisors that gave theorder to falsify the documents. In order to accomplish this, the companyexecutives would have to encourage their employees to voice their concerns inregards to the advancement of the company. Through open communication, a companycan resolve a variety of its ethical dilemmas. As for the financial aspects ofthe corporation, it has to decide whether the long term effects that a reprimandfrom the government can have outweighs their bottom line. In other words,corporations have to start moving away from the thought of instant profit andstart realizing both the long term effects and benefits. These long termbenefits can include a stronger sense of ethics in the work force as well as abetter overall society. To conclude, I must say that I agree with the use ofmitigating factors in determining moral responsibility. A company, as defined bylaw, is only a name on a piece of paper. The company acts and conducts itselfaccording to the employees that work in that entity. I use the word employeebecause in ethical thinking there should be no distinction of rank within acompany. There are times when executives can be held directly responsible and atthe same time, there are cases where employees are acting unethically withoutthe executives knowing. Neither title of executive or employee equates to moralperfection. Therefore, when a company has acted irresponsibly, its employeesmust be held liable in a proportionate amount. As for the future of ethics inbusiness I would speculate that if employees started to think more in long termbenefits and profits, many of the ethical dilemmas that we face today would begreatly reduced. As mentioned before, businesses today uses the measuring stickof profitability. There needs to be a shift to the thinking of total utility forthe social community in order to weigh business decisions. Opponents would arguethat this is a long term plan that require too many radical changes in the faceof business. Also, there is no way that an industry wide standard can be setsince there are too many types of corporations. Plus, companies have differentneeds and every moral rule is subjective according to the type of business thateveryone conducts. In response, I would argue that although there are noindustry standards that are feasible, it is possible for every company toexamine their practices as well as the attitude of their employees. There willbe companies that find that they are doing fine with employees that are aware oftheir moral values. Yet other companies will find that they do have areas thatneed improvement. It is steps like these that start implementing changes. Once afew companies start to see the benefits of changes, it can help to encourageother companies to follow suit. After all, as seen in the case of NationalSemiconductor, mistakes in one department can cause the deterioration of anentire corporation. When the costs that are possible are taken into account, thechanges required to rectify this are small in comparison.